What to Do If HMRC Sends You a Fine or Penalty

Last updated: 3 August 2025

Step 1: Understand Why You Were Fined

Start by carefully reading the letter or notice from HMRC. It should explain the reason for the penalty and how much you owe. Common reasons include:

  • Filing a Self Assessment tax return late
  • Paying your tax bill after the deadline
  • Errors on your tax return (especially if HMRC believes they were careless or deliberate)
  • Failure to notify HMRC of a change in your circumstances

Step 2: Check the Deadline for Paying or Appealing

Most penalties have a strict deadline for either paying or appealing. If you agree with the charge, paying promptly can prevent further interest or escalation. If you disagree, you’ll typically have 30 days to appeal from the date on the notice.

Step 3: Appeal If You Think It’s Unfair

You have the right to appeal most HMRC penalties. You’ll need to explain why you believe the penalty is incorrect or unfair — for example, if you filed on time or had a valid reason for missing the deadline. HMRC calls this a 'reasonable excuse'.

  • Appeal online via your Government Gateway account
  • Send a written appeal by post (using the address on the letter)
  • Call HMRC’s helpline to discuss your case, but always follow up in writing

What Counts as a 'Reasonable Excuse'?

HMRC accepts a number of circumstances as valid reasons for missing a deadline, such as:

  • Serious illness or bereavement
  • Technical issues when submitting online
  • Delays due to disability or mental health issues
  • HMRC giving incorrect advice

Step 4: Pay What You Owe to Stop Further Action

Even if you plan to appeal, it’s wise to pay the penalty to stop interest and additional charges. If your appeal is successful, HMRC will refund the money. If you can’t afford to pay right away, ask HMRC about setting up a 'Time to Pay' plan.

How to Avoid Future Penalties

  • Set calendar reminders for tax return and payment deadlines
  • File your Self Assessment early rather than waiting until January
  • Use HMRC’s online services to keep track of what’s due
  • Double-check your information before submitting
  • Get professional help from an accountant or tax adviser if unsure

Useful Links

Frequently Asked Questions

Yes. If you have a reasonable excuse or the penalty was issued in error, HMRC may cancel it after reviewing your appeal.
You don’t have to, but paying can stop additional interest. HMRC will refund you if your appeal is successful.
Not directly, but unpaid debts could eventually be passed to debt collectors or lead to court action.